O’Neill concluded, “In 2012, we intend to solidify our leadership position in fresh baked goodness and healthy choices by introducing a new smart choices menu of bagel thin sandwiches, salads and soups, and augmenting our specialty beverage platform with real fruit smoothies and new blended coffees and teas. We will also redesign our everyday value layer for breakfast and lunch and capitalize on our momentum in catering sales. Finally, we have started phase two of our cost efficiency program, which is anticipated to generate an additional $3.0 million in annualized savings. We are optimistic about the coming year and look forward to continued progress at Einstein Noah.”
Fourth Quarter 2011 Financial Results
For the fourth quarter ended January 3, 2012, system-wide comparable store sales increased 1.2%, reflecting strong growth in check and strength in catering sales. This was partially offset by lower comparable transactions. Total revenues increased 8.6% to $115.1 million from $106.1 million.
Restaurant gross margin increased 40 basis points to 21.4% due largely to lower other operating costs that were offset by continued inflation.Manufacturing and commissary gross margin decreased to $1.0 million from $1.3 million in the fourth quarter of 2010. The decline in gross margin was primarily due to higher commodity costs and an unfavorable shift in product mix to third party customers. Overall, gross margin was $26.2 million in the fourth quarter of 2011 compared to $24.2 million in the fourth quarter of 2010, but held steady at 22.8% of total revenues in both periods. General and administrative expenses decreased to $9.5 million from $10.2 million due to lower variable incentive compensation. Adjusted EBITDA was $16.8 million in the fourth quarter of 2011 compared to $14.0 million in the fourth quarter of 2010. (*) The Company incurred restructuring expenses of $0.8 million, or $0.03 per diluted share, in the fourth quarter of 2011 primarily related to its decision to close its five food commissaries to streamline its supply chain. The Columbus, Ohio commissary was closed in late 2011 and the remaining four commissaries are expected to close in the first quarter of 2012. The Company expects that the closing of the commissaries will result in savings of approximately $1.2 million in 2012.